The league of fashion brands

The league of fashion brands

Through its movie-inspired collection and its Manchester United range of products, Bengaluru-based Indus-League Clothing plans to reach the Rs. 1,000 crore revenue mark over the next two years

POORNIMA KAVLEKAR

Did you get jealous watching Kareena Kapoor flaunt her sexy figure with different outfits in the Madhur Bandarkar’s Hindi movie, Heroine? If you did, the Future Group-owned Indus-League Clothing Ltd. (Indus-League), engaged in apparel manufacture and retail, has done its job as one of the style partners for the film. “Out of the 150 outfits Kareena Kapoor wore in the movie, we designed close to 25 of them through our Jealous 21 brand, an exclusive women’s wear brand,” confirms Rachna Aggarwal, chief-executive officer and director.  In September, the company launched its “Heroine” inspired collection which includes denims, tops, party and evening dresses.  This is likely to augur well for Jealous 21 which is the fastest growing brand (growing at about 30 per cent to 40 per cent) for the company.

“Last year, we experimented with franchising options in Tier II/Tier III towns and it is working for us.”

In December 2011, the company launched the celebrity sportswear brand, Manchester United (Man U) in India and will soon have 12 exclusive brand stores. “We are not competing with Nike, Adidas or Reebok. This is more a lifestyle brand,” says Aggarwal.  There is a huge fan following for this brand and to capitalise on this, Indus-League plans to make all types of lifestyle products available (like socks, laptop bags, school bags, sipper bottles etc.) and not just stick to apparel.  The brand already has around 20 million fans from India registered on its Facebook page.  The company aims to gain significant traction from its entry into new markets and launch new collections to become a Rs. 1,000 crore company in the next two years with a healthy EBIDTA of 14 per cent to 16 per cent.  It currently has 110 stores (including 8 franchise stores) from 85 stores in January 2011 (when we last wrote about them).  By March 2013, it aims to take this number to 125 stores (includes 15 franchise stores).

Pressure points

“We have been doing different things – be it for products, marketing or distribution. And all these factors have worked together for us to grow,” says Aggarwal.  Its consolidated revenue has grown from Rs. 400 crore (year ended 2010-11 ) to Rs. 550 crore for the March 2012 fiscal. While the company’s growth has been quite robust, its margins came under pressure with the excise duty introduced in March 2011 which increased the input cost and the product cost. From September 2011, service tax was being charged on rentals and its occupation cost went up. “These factors did add some pressure on our margins and expansion,” agrees Aggarwal. She continues, “We did go through a phase where growth levels came down to eight per cent to 10 per cent as compared to the 20 per cent to 30 per cent which we were posting earlier.” The company finds good growth happening in its women’s wear while its men’s wear came under some amount of pressure.  However, there are brands and categories that have been growing at a fast pace.

Growth drivers

One of the growth factors for Indus-League has been its expansion into the Tier II and Tier III towns. “As a strategy last year, we decided to explore the franchising options in these towns and it has worked for us and we have opened six or eight stores last year. This year we will be adding almost double the number,” adds Aggarwal.

It has also expanding its product range on the brand. “For a brand like Indigo Nation, this spring/summer, we made the brand younger and more happening with the entire new campaign which is about the philosophy of “changeism” where for the current generation the only constant is the change,” shares Aggarwal. The company has introduced a range of T shirts and denim wear in the brand to appeal further to the youth.

With its smaller brands like Urbana, the company has commenced experiential marketing. “We actually engage with our target audience and demostrate that if you spill coffee or wine on a white shirt you can brush it off,” says Aggarwal.

Digital marketing is a big initiative for Indus-League. Two of its brands – Indigo Nation and Jealous 21 have more than 2.5 lakh fans on its Facebook page.

For the company, growth is not being fuelled only through own stores as these have their own gestation period and cost attached. Indus League has partnered with other brands – Reliance Trends and Pantaloon being examples.  It also sells its brands through various websites like www.myntra.com and www.fashionarra.com.

Looking ahead

There is no doubt that the general slowdown in the industry will affect apparel brands as well. While April and May were not the best months, this season has started off well for Indus-League. It has done well for both Ramzan and Onam in August. “Now we have to watch how the current festive season picks up. I expect this season to be better than last season. The early indications seem to be that way,” shares Aggarwal.  With so many international brands entering the country, fashion in India is much more advanced now and the company needs to ensure that its products also keep evolving by offering better value to the customer.  “We have found that if we do something different for customers it helps to engage them,” concludes Aggarwal.


GROWTH DRIVERS

  • Launched the celebrity sportswear brand, Manchester United
  • Launched “Heroine” inspired Jealous 21 collection which includes denims, tops, party and evening dresses
  • Expanded into the Tier II and Tier III towns through franchising option
  • Expanded product range on its brands
  • Commenced experiential marketing
  • Partnered with other stores like Reliance Trends and Pantaloon
  • Commenced digital marketing  initiatives

THEN AND NOW
REVENUE  Rs. 400 crore (FY11) Rs. 550 crore (FY12)
NO. OF EMPLOYEES  190 190 (change in the front end due to increase in the number of stores)
NO. OF STORES  85 EBOs with no franchise stores 100 EBOs & 8 franchise stores  (September 2012)
NO. OF BRANDS MARTKETED 7 8

 

Poornima Kavlekar has been associated with The Smart CEO since the time of launch and is the Consulting Editor of the magazine. She has been writing for almost 20 years on a cross section of topics including stocks and personal finance and now, on entrepreneurship and growth enterprises. She is a trained Yoga Teacher, an avid endurance Cyclist and a Veena player.